Introduction
Amkor Technology Inc. is set to receive $400 million in US government grants and approximately $200 million in loans for an advanced chip packaging project in Arizona, a significant award from the 2022 Chips and Science Act aimed at enhancing American semiconductor manufacturing capabilities and reducing dependence on foreign supply chains.
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Overview of Amkor Technology
Amkor Technology Inc., founded in 1968, is a leading provider of semiconductor packaging and test services. With its headquarters in Tempe, Arizona, Amkor operates globally, serving a diverse range of markets including communications, consumer electronics, computing, and automotive. The company’s expertise in advanced packaging technologies has positioned it as a crucial player in the semiconductor supply chain.
Investment in Arizona
The $2 billion facility in Peoria, Arizona, will focus on advanced chip packaging, creating approximately 2,000 jobs.
The site will package chips manufactured for Apple Inc. by Taiwan Semiconductor Manufacturing Co. (TSMC) at its new Phoenix complex.
This project is vital for enhancing the US’s capabilities in semiconductor packaging, a process essential for protecting and connecting chips to devices.
Significance of Advanced Packaging
As semiconductor technology advances, the packaging process has become increasingly important.
Advanced packaging is crucial for maintaining chip performance and reliability, especially as chips approach physical limits.
This process is also essential for AI hardware, with packaging bottlenecks affecting the production of Nvidia Corp.’s market-leading AI accelerators.
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Goals of the Chips and Science Act
The Chips and Science Act allocates $39 billion in grants, $75 billion in loans and guarantees, and 25% tax credits to strengthen the US semiconductor industry.
The act’s primary objectives include boosting US semiconductor packaging capacity, enhancing domestic chip production, investing in research and development, and reducing reliance on foreign supply chains.
Amkor expects to benefit from these provisions, including additional tax credits.
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Current State of US Semiconductor Packaging
In 2019, the US accounted for only 2% of the global chip packaging capacity, compared to 38% in China.
The Chips and Science Act aims to address this disparity, with $11 billion allocated for research and development, including $3 billion specifically for packaging.
This investment is crucial for the US to catch up and compete globally in the semiconductor industry.
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Industry-Wide Efforts
Amkor is part of a broader industry effort to expand US packaging capacity. Other notable investments include SK Hynix Inc.’s $4 billion packaging factory in Indiana, Samsung Electronics Co.’s expanded packaging capacity in Texas, and Intel Corp.’s new packaging facility in New Mexico.
These projects underscore the industry’s commitment to strengthening US semiconductor capabilities.
Strategic Importance of Advanced Packaging
Peter Cleveland, TSMC’s vice president of global government affairs, recently emphasized the need for advanced packaging in the US.
He noted that this technology is crucial for maintaining US competitiveness in the semiconductor industry.
Investing in advanced packaging supports technological innovation. It helps the US stay ahead globally and reduces dependency on foreign suppliers.
Economic and Strategic Impacts
The investment in Amkor’s Peoria facility will have significant economic and strategic impacts. The creation of 2,000 jobs will boost the local economy, while enhanced packaging capacity will strengthen national security by reducing reliance on foreign suppliers.
This project supports the broader goals of the Chips and Science Act, promoting technological innovation and economic growth.
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Conclusion
Amkor Technology’s $600 million in US government funding represents a critical step in advancing the nation’s semiconductor manufacturing capabilities.
With substantial investments in advanced packaging, the US is poised to become a global leader in semiconductor innovation, ensuring the industry’s continued growth and resilience.
This initiative underscores the importance of strategic investments in technology to bolster economic security and maintain a competitive edge in the global market.
